A researcher obtained a sample of 125 security analysts and
A researcher obtained a sample of 125 security analysts and asked each analyst to select four stocks on the New York Stock Exchange that were expected to outperform the Standard and Poor’s Index over a 3- month period. One theory suggests that the securities analysts would be expected to do no better than chance. Hence, the number of correct guesses from the four ­selected stocks for any analyst would have a binomial distribution with n = 4 and π = .5 yield probabilities, as shown here:
The number of analysts’ selections that outperformed the Standard and Poor’s Index are given here:
Do the data support the contention that the analysts’ performance is different from just randomly selecting four stocks?
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